Commercial advisory related to Difficult Markets


Difficult markets

It is quite hard to find a clear definition of the term In the local business press. In international practice they talk about. “difficult markets” or “taught markets.” Sometimes the industry uses also “demanding markets” but rather it relates to the product and its specificity in the overall relationship between supply and demand than any particular country.

If we look at the last ranking “Doing Business” published by the World Bank, it is easiest to do the business in Singapore and most difficult market is Eritrea. This ranking is helpful in determining the possible expansion of exports and investment in the country. Remember, however, that it mostly takes the account of local legal conditions, regulations which facilitate the establishment of the company, the tax system, the degree of market liberalization – in short, the conditions for the conduct of local business.

To a much lesser extent, the report “Doing Business” touches such issues as cultural differences, the experience of countries in cooperation with each other or the expectations of the exporter or investor for the market. This report does not indicate the difficult or easy market for, say, an exporter of cardboard packaging from Pszczyna. A country that for one company would seem easy to export development for another one may be out of reach.

Besides – the countries that are rather less popular among Polish companies, such as Algeria, Morocco and Madagascar are far more open to partners from France. From the point of view of the Pole they are so difficult but the Frenchman probably not say in such a way. This is due to the relationship of the former colonial French empire. In conclusion – difficult markets is a term that should be considered from the perspective of a particular trader in a specific country.

However, there are general characteristics that can be attributed to the so-called difficult markets:

political and economic instability,

increased risk of military conflict,

the occurrence of signs o fa totalitarian system(high corruption, low transparency of government, human rights violations)

archaic, under developed banking and capital market

threat of terrorism and drug trafficking.

Such countries are usually structures which are not fully economically and politically independent with highly volatile macroeconomic and social conditions. You have to remember that there are also countries in which there are virtually none of these elements, and can be considered as difficult, especially for entrepreneurs from Polish. Countries such as Kuwait and Qatar do not face these problems for a long time already. However, Polish trade with these countries still stands for less than 0.5% of the total Polish foreign trade.